UP:MA19.MM.4

Students know:

how to select information from a real-world financial problem, such as the initial amount of the investment and its periodic rate of change, and use it along with a geometric sequence to model compound interest and proportional depreciation.

Students are able to:

Identify the first term and common ratio in a geometric sequence.
Recognize that the first term of a geometric sequence is the initial value of the loan or investment.
Recognize that the common ratio is either (1+rate of growth) or (1-Rate of decay).
Use a geometric sequence to model compound interest or proportional depreciation.
Display data found using a geometric sequence to model compound interest or proportional depreciation. Relate APR to APY using compound interest formulas.

Students understand that:

the initial amount of an investment or a loan and its periodic rate of change correlate to the first term and the common difference in a geometric sequence.
Geometric sequences can be used to model compound interest and proportional depreciation.
The annual percentage rate is the yearly rate of interest while the annual percentage yield is the rate you actually pay when compound interest is included.